Precious Metal Prices

Precious metals explained

A precious metal is a rare, naturally occurring metallic chemical element of high economic value, which is not radioactive (excluding natural polonium, radium, actinium and protactinium). Chemically, the precious metals are less reactive than most elements, have high lustre, are softer or more ductile, and have higher melting points than other metals. Historically, precious metals were important as currency, but are now regarded mainly as investment and industrial commodities. Gold, silver, platinum, and palladium each have an ISO 4217 currency code.
The best-known precious metals are gold and silver. While both have industrial uses, they are better known for their uses in art, jewellery and coinage. Other precious metals include the platinum group metals: ruthenium, rhodium, palladium, osmium, iridium, and platinum, of which platinum is the most widely traded. [1] During the last decades, the use of platinum, palladium and ruthenium as chemical catalysts has steadily risen.The demand for precious metals is driven not only by their practical use, but also by their role as investments and a store of value. Historically, precious metals have commanded much higher prices than common industrial metals. In January 2009, gold was about $840.00/troy ounce and silver was about $11.00/troy ounce, compared to copper at $0.11/troy ounce and nickel at $0.36/troy ounce.
In the early part of the 21st century, precious metal prices rose significantly and recycling precious metals became more and more attractive. Some companies have been doing recycling for many years, such as Sabin Metal Corporation (since 1945).

Feature 2

Feature 3

Feature 4

Precious metal investment

Precious metal investment

Friday, 16 September 2011

Gold prices may reach $6,200 per ounce in a bull run which will “end all major bull markets,” Urs Gmuer, asset manager at Dolefin, a Swiss investment advice firm, told CNBC.

Gmuer’s prediction is based on analysis of the last major gold boom of the 1970s, during which gold prices rose from $35 per ounce to $850 per ounce. Gmuer said that in the current bull run, prices would be pushed upwards by a protracted period of global economic difficulty—potentially lasting years—during which investors would continue to search for so-called safe havens.

“Gold prices have risen over the last few years, as the macroeconomic picture has become worse. The deterioration of the fundamental situation has now gone even further.

“Purchases by investors of gold will be based on fears of systemic risk or banking crashes,” Gmuer said.

The investment manager said that as no "safe" currencies remain, cautious investors had no choice but to opt for precious metals.

“The ultimate currency, which has stood the test of time, which has no political support behind it, is gold. Nobody can print gold out of a machine or a PC.

Gmuer said the precious metal had entered a “super-cycle,” which he likened to the 1998-to-2000 boom in technology media and telecommunications.

He added, “This bull trend will end all the other major bull markets,” and singled out debt capital as an asset class for which demand and prices would decline.

However, Gmuer denied that high and rising gold prices could be indicative of a bubble. “If everybody is saying a particular asset is a bubble, that reflects the fact that most people have disposed of it,” he said.

Other calculations indicate that gold prices could peak at $3,500 or $4,000 per ounce. This is based on historical data regarding the long-term ratio of gold prices to the global money supply.

On Sept. 2, gold peaked at $1884.60.

Silver Set for 14-Fold Price Rise?

In addition, Gmuer said silver is set for an even greater upward run than gold, with the market due to correct a distortion in its pricing of silver in relation to gold.

Gold and silver currently price at a ratio of around 45:1. However, Gmuer said declining silver output over the last 60 years—as a result of inventory depletion and mine closures—meant silver supplies currently outnumber gold by a ratio of less than 10:1, thus indicating a market correction is due.

Once this occurs, Gmuer said silver prices would settle at 6.7 percent to 10 percent of gold prices. This implies that if gold reaches $6,200 per ounce, silver could peak at $620 per ounce.